Safaricom fights off dominance claims

August 18, 2011
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Safaricom CEO Bob Collymore

, NAIROBI, Kenya, Aug 18 – Listed telecommunications firm Safaricom has once again refuted claims that it is a dominant player in the mobile telephony market adding that the provisions of the law must be strictly followed if attempts to classify it as such should be made.

 

Safaricom Chief Executive Officer Bob Collymore was responding to a paper released by the Communications Commission of Kenya (CCK) which signalled its intention to declare it as dominant in retail mobile voice and Short Message Services and Telkom Kenya Limited in retail fixed voice and transit services.

“We wish to clarify that at this time Safaricom Limited has not been declared dominant and no regulatory interventions have been pronounced against us,” maintained the CEO.

He however did acknowledge that under the Kenya Information and Communications Act and the Regulations, the CCK does have powers to manage certain aspects of competition in the telecommunications industry and declare any players in the telecommunications industry as a dominant player.

The objective of the Consultation Paper released last week aims to notify all licensees about its intention to subject certain services or products to appropriate and proportionate regulation in order to address market failures and competition concerns.

In the paper titled the “Regulated Services in Specific/Relevant Markets in the Telecommunications Market in Kenya’, the regulator cited Safaricom’s market shares of 69.9 percent in subscriber base and 81 percent in revenues which it said are “considered above the threshold that would lead to a rebuttable presumption of dominance.”

CCK gave all other operators up to August 26, 2011 to submit their views before the final decision is made.

“We expect that CCK will carry out further consultations before any pronouncements are made. It is our view that the recently enacted Competition Act and the newly created Competition Authority, which is the ultimate authority on competition issues in Kenya market, should be engaged in this process,” said Mr Collymore.

Safaricom however opines that after the consultation process CCK may or may not regulate its retail mobile voice and SMS services.

If this is done, then the regulator must prove Safaricom has abused its dominance and employed some anti-competitive tactics hence the need for some interventions.

“We believe Safaricom has attained its current market share based on fair competition on the back of innovation, investment in our brand and providing relevant services to our customers. In any event, retail price controls is considered a drastic measure of last resort and the Kenya Government has been clear that it will avoid retail price controls in competitive markets,” the CEO reiterated.

This is not the first time that the telecommunications giant has had to fight off ‘dominance’ claims.

In May last year, Safaricom had to initiate dialogue with the government to seek consensus on the disputed Kenya Information and Communication regulations of 2010, which it argued sought to punish it for its success.

The company has always maintained that all four operators have been operating on a level playing field with no dispensation given to it.

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